Multiple options for financing, stability, and high profitability are some of the aspects that have positioned investing in properties as one of the most attractive alternatives for investors.
However, to maximize the results of our investments, it is essential to be informed about the versions of real estate investments that exist. Therefore, we present the primary mechanisms to invest in properties together with their distinctive characteristics.
How to invest in properties in Chile? Before spending
To understand the behavior of the different types of real estate investments, it is essential that we understand the concept of the annual rate of return, which is the percentage of the total amount invested that is “returned” to the investor in one year.
For example, a department of $ 100,000,000 that presents an annual rate of return of 5%, leaves $ 5,000,000 in yearly profits, that is, it takes 20 years to “pay for itself.”
How to invest in properties in Chile? Houses and apartments
Buying homes to rent them is probably the most common property investment mechanism. Most of the annual market transactions correspond to purchases of houses and apartments.
Investments in homes have the following characteristics:
High maintenance cost Contributions, everyday expenses and even dividends can be paid in full by the investor.
The demand and the rates of return are more significant in small apartments -between 1 and two bedrooms.
How to invest in properties in Chile? Parking lots
Every day there are more vehicles and fewer free spaces, so investing in parking is presented as an intelligent strategy. The main characteristics of these properties are the following:
There is a relatively scarce supply, especially in densely populated sectors or with a high percentage of the floating population.
They have meager maintenance costs.
The profitability of the parking lots is high, in figures that move between 8% and 10% per year.
The highest returns are obtained in buildings exclusively for parking.
How to invest in properties in Chile? Offices
The construction of office buildings remains on the rise, so it is essential that we evaluate the parameters well before deciding to invest in this area. This segment has the following characteristics:
Relatively high stock. In Santiago, for example, 1,200,000 m² of offices have been built, and the demand for these is estimated at 100,000 m².
Las Condes -with a 10.8% return- is the most attractive commune to carry out this type of investment, while in Lo Barnechea the opposite situation is experienced, showing an annual rate of return of 7%. The average return rate stands at 9.6%.
The dynamism in the leasing of offices is weak in times of low economic activity, which translates into higher vacancy rates.
How to invest in properties in Chile? Wineries
The wineries are a relatively new investment niche, so we expect the arrival of new players to the market. Beyond that, distinctive characteristics of these assets are already identified:
Profitability rates range between 7% and 12%, which is considered high.
The highest demand is registered in the northern and northwestern areas of the capital.
Low maintenance costs.
It is to expect that in the coming years the area will present a sustained growth.
Whether in homes, offices, warehouses and parking lots, the real estate market offers us different niches to invest in, therefore we must make the best decision according to our interests.